# Notice of Final Determination of Sales at Less Than Fair Value: Silicomanganese From Brazil

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A94-27546

## Record

- **Collection:** Federal Register
- **Document type:** Uncategorized Document
- **Published:** November 7, 1994

## Text

DEPARTMENT OF COMMERCE
[A-351-824]

Notice of Final Determination of Sales at Less Than Fair Value:
Silicomanganese From Brazil

AGENCY: Import Administration, International Trade Administration,
Department of Commerce.

EFFECTIVE DATE: November 7, 1994.

FOR FURTHER INFORMATION CONTACT:
Paul Kullman or John Brinkmann, Office of Antidumping Investigations,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.;
Washington, DC 20230; telephone: (202) 482-1279 or (202) 482-5288,
respectively.

FINAL DETERMINATION: We determine that imports of silicomanganese from
Brazil are being, or are likely to be, sold in the United States at
less than fair value, as provided in section 735 of the Tariff Act of
1930, as amended (the Act). The estimated margins are shown in the
``Continuation of Suspension of Liquidation'' section of this notice.

Case History

Since the preliminary determination and postponement of the final
determination of this investigation on June 10, 1994, (59 FR 14852,
June 17, 1994), the following events have occurred:
On June 16, 1994, the U.S. Department of Commerce (the Department)
received the response of Companhia Paulista de Ferro-Ligas and Sibra
Eletro-Siderurgica Brasileira S/A (collectively ``Paulista'') to the
Department's cost of production (COP) and constructed value (CV)
questionnaire. The Department sent a COP/CV deficiency questionnaire to
Paulista on July 8, 1994, which the company answered on July 29, 1994.
On August 3, 1994, the Department sent a letter requesting additional
clarification, which the company responded to on August 23, 1994.
The Department conducted verification in Brazil of Paulista's COP/
CV response in August 1994.
On September 2, 1994, Paulista informed the Department that it
would no longer be participating in the investigation. Paulista cited a
lack of personnel and the fact that the company was operating under the
Brazilian equivalent of U.S. Chapter 11 bankruptcy protection as
reasons why it was withdrawing from the investigation. Paulista
requested that all of its proprietary information be removed from the
record.
The petitioners (Elkem Metals Company and the Oil, Chemical &
Atomic Workers, Local 3-639) submitted a case brief on September 23,
1994. Paulista submitted a rebuttal brief on September 28, 1994. At
petitioners' request, a public hearing was held on September 30, 1994.

Scope of the Investigation

The merchandise covered by this investigation is silicomanganese.
Silicomanganese, which is sometimes called ferrosilicon manganese, is a
ferroalloy composed principally of manganese, silicon, and iron, and
normally containing much smaller proportions of minor elements, such as
carbon, phosphorous and sulfur. Silicomanganese generally contains by
weight not less than four percent iron, more than 30 percent manganese,
more than eight percent silicon and not more than three percent
phosphorous. All compositions, forms and sizes of silicomanganese are
included within the scope of this investigation, including
silicomanganese slag, fines and briquettes. Silicomanganese is used
primarily in steel production as a source of both silicon and
manganese. This investigation covers all silicomanganese, regardless of
its tariff classification. Most silicomanganese is currently
classifiable under subheading 7202.30.0000 of the Harmonized Tariff
Schedule of the United States (HTSUS). Some silicomanganese may also
currently be classifiable under HTSUS subheading 7202.99.5040. Although
the HTSUS subheadings are provided for convenience and customs
purposes, our written description of the scope is dispositive.

Period of Investigation

The period of investigation is June 1, 1993, through November 30,
1993.

Such or Similar Comparisons

We have determined that the merchandise subject to this
investigation constitutes two such or similar categories, lumps and
fines.

Best Information Available (BIA)

As noted in the ``Case History'' section of this notice, Paulista
withdrew from the investigation after completion of the COP/CV
verification and requested that all of its proprietary data be removed
from the record. Section 776(c) of the Act provides that whenever a
party refuses or is unable to produce information requested in a timely
manner and in the form required, or otherwise significantly impedes an
investigation, the Department shall use BIA as a basis for its
determination. Consequently, we have based this determination on BIA.
In determining what rate to use as BIA, the Department follows a
two-tiered methodology, whereby the Department normally assigns lower
margins to those respondents who cooperated in an investigation and
margins based on more adverse assumptions to those respondents found to
be uncooperative in an investigation. The Department's two-tiered
methodology for assigning BIA has been upheld by the U.S. Court of
Appeals for the Federal Circuit. (See Allied Signal v. United States,
996 F.2d 1185 (Fed. Cir. 1993) (June 22, 1993)).
When a company refuses to cooperate or otherwise significantly
impedes an investigation, the Department normally uses as BIA the
highest of: (1) the highest margin in the petition; (2) the highest
margin calculated for any other respondent within the same country for
the same class or kind of merchandise; or (3) the estimated margin
found for the affected firm in the preliminary determination. (See
Final Determination of Sales at Less Than Fair Value: Antifriction
Bearings (other than Tapered Roller Bearings) and Parts Thereof from
the Federal Republic of Germany, 54 FR 18992, 19033 (1989)).
As detailed in the DOC position in Comment 1 below, we consider
Paulista to have been uncooperative. Under our standard practice, we
would have selected as the most adverse BIA for this investigation the
estimated margin found for Paulista in the preliminary determination.
However, because Paulista withdrew all of its proprietary data from the
record, we cannot rely on the preliminary determination. Smith Corona
Corp. v. United States, 796 F.Supp. 1532 (CIT 1992) (Smith Corona). It
would be inappropriate to allow Paulista to thwart proper
administration of the law and reward its uncooperative behavior by
selecting as BIA the highest rate in the amended petition, which is
less adverse than the preliminary rate. Therefore, we assigned to
Paulista a BIA margin by comparing United States price (USP) to CV,
based on information in the record. (For a discussion of this BIA
calculation see the ``Fair Value Comparisons'' section of this notice
and Comment 2 below).
In calculating the ``All Others'' rate, the Department normally
weight averages all positive margins found in the investigation,
including BIA rates. As discussed above, as an uncooperative
respondent, Paulista will receive an adverse BIA margin. Because
Paulista's margin is the only margin found in the investigation, under
our normal practice, its margin would become the ``All Others'' rate.
The Department notes, however, that in Smith Corona, the Court of
International Trade (CIT) held that the Department may assign a rate
lower than the highest available rate to nonparticipants in an
investigation, when those parties (1) had no control over the sole
respondent's withdrawal of documentation, (2) had no reason to believe
that an adverse rate would be selected for the respondent as a result
of the withdrawal of information, and (3) had no opportunity to offer
their own data.
In the present case, as in Smith Corona, producers/exporters who
were not respondents had no control over Paulista's withdrawal of its
information, had no reason to believe that Paulista would receive an
adverse rate as a result of withdrawing information, and by virtue of
the point at which Paulista withdrew its information from the record,
had no opportunity to submit their own data for analysis and
verification. We have concluded that, under these circumstances,
assigning an adverse BIA rate to all other producers/exporters would be
inappropriately punitive. Therefore, the Department has based the ``All
Others'' rate in this investigation on the dumping margin which formed
the basis for the initiation of this investigation.

Fair Value Comparisons

As BIA, we have calculated a margin for Paulista based on a
comparison of USP and foreign market value (FMV). USP was based on
information contained in the petition, as fully described in the notice
of initiation of this investigation (58 FR 64553, December 8, 1993).
FMV was based on CV, using data submitted by petitioners and relied
upon by the Department in its initiation of the COP investigation (See,
Memorandum from Richard W. Moreland to Barbara R. Stafford, May 13,
1994, on file in Room B-099 of the Main Commerce Building), adjusted
for interest expense and profit. In accordance with section
773(e)(1)(B)(ii), we added the statutory minimum of eight percent for
profit and recalculated interest expense based on the consolidated
results of the operations of Paulista for the year ending December 31,
1993, as reflected in its public financial statements. Since FMV is
based on a CV, which is exclusive of any value added taxes (VAT), we
have adjusted USP to exclude the VAT adjustment that was made for
purposes of this initiation.

Interested Party Comments

Comment 1: Petitioners argue that the Department should find
Paulista uncooperative because it withdrew its participation from the
investigation and removed all of its proprietary information from the
record.
Paulista states that the company devoted significant time and
resources to provide the information requested by the Department during
the course of the investigation, allowed verification of its cost
response and provided additional information to the Department after
the cost verification.
DOC Position: We agree with petitioners. By withdrawing from the
investigation, Paulista significantly impeded the completion of the
Department's investigation. Moreover, in light of Paulista's removal of
all of its proprietary information from the record, the Department has
no choice but to treat Paulista as an uncooperative respondent. This
action has the consequence of expunging from the administrative record
the basis for showing, either now or on appeal, that Paulista had been
cooperative during this investigation. (See, e.g., Final Determination
of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat
Products and Certain Cut-to-Length Carbon Steel Plate from Italy, 58 FR
37153 (July 9, 1993); Final Determination of Sales at Less Than Fair
Value: Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from
France, 58 FR 6205 (January 27, 1993)).
Comment 2: Petitioners argue that Paulista withdrew from the
investigation only after recognizing that the results of the
investigation would be more favorable if based on the petition or
initiation rate. Consequently, petitioners argue that the Department
must look beyond the pool of rates identified in its two-tier BIA
policy, since none of those rates was sufficiently adverse to compel
Paulista's cooperation. Petitioners contend that, as BIA, the
Department should use data in petitioners' COP allegation and
Paulista's financial statements to calculate FMV, and data provided in
Paulista's own ranged public submissions of its questionnaire response
to calculate USP. In addition, the petitioners contend that because
Paulista was uncooperative, the Department should ``de-range'' USP
information provided in the public version of Paulista's response by
reducing gross prices by 10 percent and increasing the foreign movement
charges and U.S. selling expenses by 10 percent.
Paulista agrees that BIA is warranted in this investigation.
However, Paulista contends that the company's ranged public data should
not be used to calculate USP. Paulista argues that the use of its
ranged public data as BIA would be unprecedented and contrary to the
intent of the Department's public summary requirements, which is to
provide meaningful summaries of data for the public. Additionally,
Paulista asserts that there is sufficient information on the record in
this investigation to establish a BIA dumping rate without resorting to
the use of ranged data.
DOC Position: We agree with the petitioners that Paulista should
not be rewarded for withdrawing from the investigation. In order to
assign Paulista an adverse BIA rate, the Department cannot rely on the
margin calculated in the preliminary determination because the use of
such a rate would not comport with the CIT's decision in Smith Corona.
While the Department might otherwise rely on the amended petition for
purposes of BIA, given the circumstances of this case and the intent of
the statute, we do not find that the rates contained in that petition
provide an adequate basis for BIA. Section 776(c) of the Act provides
for the use of BIA to compel participation. Further, a more adverse BIA
is required where a respondent fails to cooperate or significantly
impedes the investigation, as in this case. The preliminary margin was
substantially higher than the rate found in the amended petition for
purposes of initiation. To use the petition rate would, in effect,
reward the respondent for refusing to cooperate. Moreover, a precedent
could be set which would encourage a respondent to withdraw from a
proceeding and remove its proprietary information from the record
whenever the margin found in the preliminary determination exceeded
that which formed the basis of the initiation (e.g., Krupp Stahl A.G.
v. United States, Slip Op. 93-84, May 26, 1993).
We disagree, however, with petitioners' proposed selection of BIA.
Although the Department has used such ranged data as a basis for BIA in
the past, the use of such information is a last resort. In this
instance, we are not compelled to use the ranged data in order to
calculate an adverse final determination rate. There is sufficient data
available in petitioners' COP allegation and Paulista's public
financial statement to calculate a FMV based on CV. This methodology is
consistent with both past practice (see, e.g., Final Determinations of
Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat
Products, Certain Cold-Rolled Carbon Steel Flat Products, and Certain
Cut-to-Length Carbon Steel Plate From Belgium, 58 FR 37083 (July 9,
1993), and with the CIT's holding that respondents should not realize a
benefit from noncooperation.

Continuation of Suspension of Liquidation

In accordance with Section 735(c)(4) of the Act, we are directing
the Customs Service to continue to suspend liquidation of all entries
of silicomanganese from Brazil that are entered, or withdrawn from
warehouse, for consumption on or after June 17, 1994, the date of
publication in the Federal Register of our preliminary determination.
The Customs Service shall require a cash deposit or posting of a bond
equal to the estimated amount by which the FMV of the merchandise
subject to this investigation exceeds the U.S. price, as shown below.
This suspension of liquidation will remain in effect until further
notice. The dumping margins are as follows:

------------------------------------------------------------------------
Antidumping
Producer/manufacturer exporter margin
------------------------------------------------------------------------
Paulista.............................................. 64.93
All Others............................................ 17.60
------------------------------------------------------------------------

International Trade Commission (ITC) Notification

In accordance with section 735(d) of the Act, we have notified the
ITC of our determination. The ITC will now determine whether these
imports are materially injuring, or threaten material injury to, the
U.S. industry within 45 days. If the ITC determines that material
injury, or threat of material injury, does not exist with respect to
the subject merchandise, the proceeding will be terminated and all
securities posted will be refunded or canceled. If the ITC determines
that such injury does exist, the Department will issue an antidumping
duty order directing Customs officials to assess antidumping duties on
all imports of the subject merchandise from Brazil entered, or
withdrawn from warehouse, for consumption on or after the effective
date of the suspension of liquidation.

Notification to Interested Parties

This notice also serves as the only reminder to parties subject to
administrative protective order (APO) of their responsibility, pursuant
to 19 CFR 353.34(d), concerning the return or destruction of
proprietary information disclosed under APO. Failure to comply is a
violation of the APO.
This determination is published pursuant to section 735(d) of the
Act and 19 CFR 353.20(a)(4).

Dated: October 31, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-27546 Filed 11-4-94; 8:45 am]
BILLING CODE 3510-DS-M

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-27546. Public record. Not legal advice.